Solar power in Australia shows great promise. Its potential is clear: high levels of solar radiation bring low payback times and more inclination to invest in this renewable energy source. Despite the achievements in renewable power generation, the road to independence from fuel is still a long one and Energy Communities are the next step.
The Australian energy situation is different from any other and has specific characteristics. Let’s look at some facts about solar energy.
#1 Australia’s solar radiation is the highest in the world
This continent has the highest solar radiation per square metre in the world: solar radiation per year is an average of 58 million PJ (Peta Joules), 10 k time more than Australian energy consumption. This is a great asset for solar energy generation and particularly in this phase of implementation of renewable energy.
#2 Australian rooftops with solar PVs continue to increase
According to the last Clean Energy Australia Report 2019, in 2018 the residential sector grew by 43% with 1.55 GW of systems installed over that year and an average system size of 7.13 kW.
By the end of 2018, with 218,195 new installations Australia reached over 2 million households with solar PV, meaning one in five Australian families benefits from a PV system.
And these figures are set to increase further. According to SunWiz, at the end of 2019 another 2.13 GW of small-scale solar systems were installed, bringing the residential total to 10 GW. Rooftops with solar panels reached 2.25 million.
#3 Solar PV distribution changes by state in Australia
The percentage of solar rooftops is 20.3% and distribution across Australia is very patchy:
- Western Australia: 280k installations with a capacity of 7.9 GW
- Northern Territory: 11k installations with a capacity of 71 MW
- Queensland: 592k installations with a capacity of 2.3 GW
- New South Wales: 450k installations with a capacity of 1.8 GW
- Victoria: 372k installations with a capacity of 1.5 GW
- South Australia: 240k installations with a capacity of 970 MW
- Tasmania: 33k installations with a capacity of 132 kW
#4 Solar reached 5.2% of the Australian total energy mix
Renewable energy generation in that year reached 21% of total power generation, the highest peak ever. The main renewable source was hydroelectric (7.5%) with generation of 17,002 GWh. The other sources were:
- Wind: 7.1% (16,171 GWh)
- Small-scale solar PV, up to 100 kW: 4.2% (9,452 GWh)
- Bioenergy: 1.5% (3,412 GWh)
- Large-scale solar PV, over 5 MW: 0.8% (1,875 GWh)
- Medium-scale solar PV, between 100 kW and 5 MW: 0.2% (367 GWh)
Solar reached 5.2% of the total power generation and 24.3% of renewable energy generation.
#5 Government rebates support the growth of solar generation
This growth was possible thanks to Government rebates in the form of the RET (Renewable Energy Target) and FiT (Feed-in Tariff).
The Renewable Energy Target (RET) is a Federal Government policy aimed at reducing CO2 emissions in the energy sector, encouraging residents and businesses to generate energy from more sustainable and renewable sources. The incentive has the goal of delivering a 23.5% share for renewables in Australia’s electricity mix by 2020. This policy allows both large-scale stations and small-scale systems to create certificates for every MWh of power generated.
#6 The LRET supports achievement of national renewable generation goals
The scheme dedicated to commercial systems over 100 kW is called the Large-scale Renewable Energy Target (LRET) and must ensure 33,000 GWh from renewable sources by 2020. Big companies with high energy consumption need to fix an amount of energy that must come from RES (renewable energy sources). This is possible by purchasing large-scale generation certificates (LGCs) from accredited power stations such as solar or wind farms, and then annually submitting these certificates to the Clean Energy Regulator.
This LGCs market continues until 2030, along with the obligation for high energy users, even though the LRET for 2020 was met early in September 2019. The Regulator announced that this was an astonishing accomplishment, considering that half of this energy was made since 2017 and that it was made possible by approval of the 148.5 MW Cattle Hill Wind Farm in Tasmania.
#7 The SRES boosts residential and small commercial solar PV installation
Meanwhile, the Small-scale Renewable Energy Scheme (SRES) is an incentive for individuals and small businesses to install certified renewable energy systems up to 100 kW, such as:
- solar photovoltaic panels
- wind turbines
- hydroelectric systems
- solar water heaters
- heat pumps
The owners obtain small-scale technology certificates (STCs), in a quantity defined by the amount of energy the system can produce, and their value stands at around $37.00. They can be sold to high energy users that have to submit them to the Regulator every three months. The certificates cover approximately 30% of a 5-kW system’s total cost, which is about $2000 to $3000.
The SRES also expires in 2030 and a report by the Australian Competition and Consumer Commission recommends abolishing them to reduce electricity costs. However, the Clean Energy Council is opposed to this because they are synonymous with high standards of safety and quality.
#8 FiTs ensure payment for the extra energy fed into the grid
A second rebate for residential RES system owners is the Feed-in Tariff, a credit for any amount of power exported back into the National power grid, usually set by energy retailers per kWh and paid on the electric bill.
FiT schemes differ by state: under most, the minimum rate per kWh offered by energy retailers is fixed by regulations, except in New South Wales and Queensland where there is no minimum. Tariffs range between 6 and 30c/kWh, more often 7-16 cents/kWh. A general suggestion is to compare energy suppliers’ offers and get the best deal available.
#9 Payback times depend on different factors
Payback times depend on FiTs and other factors:
- Sunlight hours
- System cost and productivity
- Site characteristics
For instance, a 5 kW PV system, as one of the most popular sizes, installed in any of the state capitals, has an average cost of $5250. The payback period varies from 2-3 years in Adelaide to 5-6 years in Darwin with an export rate at 50%. The payback period increases to 7 years for the same system installed in Hobart, with an export rate of 75% of energy generated.
#10 Every Australian state Government can govern its own solar rebates
The Government of every state sets its solar rebates and incentives:
- Australian Capital Territory has a low-income solar programme and offers grants for energy storage
- Queensland has interest-free loans and grants for solar PV panel and storage
- Victoria offers solar PV and thermal panel rebates
- South Australia runs a home battery scheme with higher subsidies for low-income
#11 Climatic conditions harm the Australian electricity grid
Weather conditions such as bushfires and strong wind and rain down the East Coast last February placed grid stability at risk, affecting cables, substations and connectors, and causing blackouts for thousands of homes. The areas struck hardest by these conditions are those less connected to the grid.
#12 Australia is a resilient country and solar PV can help
The climate puts Australia in a tough position, but the new decentralised grid vision and increasing energy storage system (ESS) implementation could broaden the future of the renewable energy sector and contribute to the stability and well-being of Australian citizens.
This is the reason why energy storage and back up storage systems are spreading across the country and most of the states offer an incentive for their installation. Another way to reinforce the grid is to create microgrid systems that can support themselves without the power of the retailers. An example of this is Solar Communities, or Digital Energy Communities, where the public grid allows participants to share energy amongst them, increasing self-consumption of energy generated and stored locally. In this scenario, members will be able to avoid blackouts during extreme weather events that interrupt the national electricity supply, or even cut off the connection to the main grid. The entire energy community can be independent nearly all of the time.
DERs (i.e. Distributed Energy Resources) in Australia have increased significantly during recent years, offering householders the advantages of on-site generation and self-consumption of energy but, without proper management, grids could fail to fully harness DER output.
Regalgrid®’s digital energy platform provides a revolutionary approach to the energy market: it enables prosumers and consumers to manage the energy generated on-site by their own DERs. The Regalgrid platform offers complete control of inverters and energy storage devices to maximise the contribution from DERs, creating the possibility for aggregation, VPPs (virtual power plants) and reduced dependence on resources outside the local cluster. The energy fleet within the energy community is completely managed by Regalgrid cloud architecture. The community itself acts as a balanced node with near-zero exports, increasing grid security, and acting as a backup during power outages. The benefits of Regalgrid’s platform extend to all participants for a true democratization of energy.